Peter Bofinger, Thomas Haas, 01 February 2021

Central bank digital currencies are increasingly being discussed, mainly in relation to monetary policy and financial stability, but with less focus on their fundamentals. This column provides a comprehensive taxonomy for categorising central bank digital currency design options, and evaluates these options based on their allocative efficiency and attractiveness for users. The analysis shows that digital cash substitutes cannot be justified from either perspective. Instead, there is huge potential for central bank digital currencies in a retail payment system organised by the central bank, but without a new, independent payment object.

Nikhil Agarwal, Itai Ashlagi, Eduardo Azevedo, Clayton Featherstone, Omer Karaduman, 03 November 2018

National kidney exchange platforms significantly boost the number of life-saving kidney transplants by finding complicated exchange arrangements that are not possible within any single hospital. This column examines US data and finds that the majority of kidney exchanges continue to be performed within hospitals, suggesting a fragmented market that comes at a large efficiency cost. National platforms may need to be redesigned to encourage full participation, with reimbursement reform.

Jean Tirole, 24 November 2017

Market and state failures lead to inefficiencies. In this video, Jean Tirole discusses how corporate social responsibility can help achieve the common good. This video was recorded at the 6th Lindau Meeting on Economic Sciences in September 2017.

Peter Bofinger, 08 April 2016

Diagnosing the EZ Crisis is a critical first step towards developing a consensus on how the monetary union should be fixed. This column contrasts views that place the blame mostly on markets with those that place the onus on governments. The fixes necessary for the survival of the euro are – correspondingly – more ‘market discipline’ or ‘political discipline’ exerted at the European level. Neither is very attractive, but it should be clear that ‘market discipline’ is not a mechanism run by atomistic players. Global wealth is highly concentrated, so market discipline means, de facto, a regime of plutocracy.

Maitreesh Ghatak, Madhav Aney, Massimo Morelli, 18 August 2011

Political economists study how distortions in political access can lead to policies that lead to market failures. The authors of CEPR DP8533 examine the reverse link, mapping out how market failures could create political cleavages which can then amplify the market failure by voting for bad policies.

Barbara Petrongolo, 15 October 2010

The 2010 Nobel Prize in Economics has been awarded to Peter Diamond, Dale Mortensen, and Christopher Pissarides "for their analysis of markets with search frictions". This column explains how their research relates to fundamental economic issues that are both at the core of the wellbeing of society at large and now near the top of many policymakers’ agendas.

Charles Wyplosz, 20 September 2007

Public interventions are bad except when there is a well-identified market failure. Since early August, we have witnessed a massive market failure due to acute information asymmetry. Intervention should directly address the failure, but that’s not possible this time, so we have the second-best solution. Why is it that a second-best solution is better than none?


CEPR Policy Research